IFTA & BIO-DIESEL

BIODIESEL MANUFACTURING

An Accountant’s Eye View

Soy Oil Arrives Via Railcar

9,500 Gallon Reactor

Close-up of 9,500 Gallon Reactor

Manufactures 120,000 gallons B100 per month

Computer-Assisted Manufacturing

Quality Assurance?

Texas Administrative Code -Definitions

Rule 3.203(1) Water-based diesel fuel—a combination of

water, petroleum diesel fuel, emulsifier, and seasonal additives (when necessary) into an emulsion that is suitable or used for the propulsion of a diesel-powered motor vehicle.

Definitions (cont’d)

(2) Fuel ethanol—alcohol that is made from agricultural products and bioethanol that is made from cellulosic biomass materials.

cellulosicrelated to or made from the structure of plants

biomass1 : the amount of living matter (as in a unit area or volume

of habitat)2 : plant materials and animal waste used especially as a source of fuel

Definitions (cont’d)

(3) Biodiesel —a petroleum diesel fuel substitute that is manufactured from vegetable oils, animal fats, or recycled greases combined with alcohol (ethanol or methanol) in the transesterification process.

EsterificationNOUN: A chemical reaction resulting in the formation of at least one ester product.

EsterAn organic compound formed by reaction of an acid with an alcohol.

Proposed New Definitions (per September 2003 FTA Motor Fuels Uniformity Group Meeting)

BIO DIESEL - A fuel comprised of monoalkyl esters of long chain fatty acids generally derived from vegetable oils or animal fats, designated B100, and meeting the requirements of ASTM D 6751.

BIODIESEL BLEND - A blend of biodiesel fuel meeting ASTM D 6751 with petroleum based diesel fuel, designated Bxx where xx represents the volume percentage of Biodiesel fuel in the blend. (Example: B20 is 20% Biodiesel and 80% petroleum diesel).

Invoice Documentation

Product must be identified by a commonly accepted commercial or industry name for the blended product.

Volume in gallons (rounded to the nearest whole gallon) or the percentage (rounded to the nearest tenth of one percent) of the blended product that is water, fuel ethanol , or biodiesel.

Refunds of Diesel Tax Paid

If a person pays the full $.20 tax per gallon Texas tax on biodiesel, ethanol blended diesel or water based diesel they may file a Refund Claim with the State of Texas for the biodiesel, ethanol blended diesel or water based diesel USED in Texas. (The refund is subject to the motor fuels rules and statute of limitations.)

Commercial Vehicles licensed under IFTA

1. The biodiesel, ethanol blended diesel fuel or water-based diesel fuel is presumed to be used in the jurisdiction in which it was purchased unless the purchased amount is greater than the amount consumed in that jurisdiction.

2. The total gallons of diesel fuel that are consumed to calculate the fleet average miles per gallon, includes the total gallons of biodiesel, ethanol blended diesel fuel or water-based diesel fuel.

REPORTING AND AUDITING

Reported and audited Texas tax paid gallons of biodiesel, ethanol blended diesel fuel or water-based diesel fuel that were purchased at the reduced rate must be adjusted for reporting Texas tax paid gallons.

Gallons on which a refund has been received must also be adjusted.

EXAMPLE

Texas Purchases

200TOTAL TEXAS GALLONS PURCHASED(Include in Total Gallons)

100Petroleum diesel delivered into IFTA vehicles ($ .20 tax rate)

100Biodiesel (B20) delivered into IFTA vehicles ($ .16 tax rate)

Texas Usage

25Total Texas Taxable Gallons (125/5)

125Texas Taxable Miles

5IFTA MPG

REPORTED (AUDITED) TEXAS TAX PAID

GALLONS

Adjusted Reported (Audited) Texas Tax Paid Gallons

100PETROLEUM DIESEL

BIODIESEL

80$16.00 / $ .20 (Texas tax rate)

<155>25 – 180Texas Credit Gallons

$ 16.00100 gallons X $ .16(paid tax rate)